PEEK OF THE WEEK
March 12, 2018
Leif Hagen & Donna Roberts
The Markets
It’s a
bird…It’s a plane…It’s a labor shortage!
There is little doubt the Millennial
generation has been reshaping our world. One of the most remarkable aspects of
this demographic group is a preference for experiences over consumer goods. “Three
out of four millennials would rather spend their money on an experience than
buy something desirable. This “experience generation” is now a third of the
U.S. population,” reported Eventbrite.
Well, a new
experience has arrived – a labor shortage in the United States.
Last week, Barron’s reported, “Across the nation, in industries as varied as
trucking, construction, retailing, fast food, oil drilling, technology, and
manufacturing, it’s becoming increasingly difficult to find good help. And,
with the economy in its ninth year of growth and another baby boomer retiring
every nine seconds, the labor crunch is about to get much worse…This, of
course, is how a labor market works: Production rises, workers get scarce, and
employers raise wages to attract employees.”
Currently, the population of the
United States is growing faster than the U.S. workforce, reported Barron’s. It’s a state of affairs that
occurred twice during the last century (1948 through 1967 and 1991 through 1999)
and was accompanied by labor shortages both times. This time, Baby Boomers’
retirements may exacerbate the situation. Some estimates suggest the current
labor shortage could last through 2050.
Despite low
unemployment and high demand for workers, wage growth slowed in February.
There is a wild card in play,
however. Many Americans prefer to participate in the workforce through the Gig
economy. Gig workers have temporary jobs or freelance rather than working for
an employer. MBO Partners reported,
“Independents are the nearly 41 million adult Americans of all ages, skill, and
income levels – consultants, freelancers, contractors, temporary, or on-call workers
– who work independently to build businesses, develop their careers, pursue
passions, and/or to supplement their incomes.”
The government has yet to figure
out how to measure the Gig economy. When it does, a clearer employment and wage
picture may emerge.
Data as of 3/9/18
|
1-Week
|
Y-T-D
|
1-Year
|
3-Year
|
5-Year
|
10-Year
|
|
Standard & Poor's 500
(Domestic Stocks)
|
3.5%
|
4.2%
|
17.8%
|
10.3%
|
12.4%
|
8.2%
|
|
Dow Jones Global ex-U.S.
|
1.8
|
0.5
|
19.6
|
5.2
|
4.1
|
1.1
|
|
10-year Treasury Note (Yield
Only)
|
2.9
|
NA
|
2.6
|
2.2
|
2.1
|
3.4
|
|
Gold (per ounce)
|
-0.1
|
1.9
|
9.5
|
4.2
|
-3.5
|
3.1
|
|
Bloomberg Commodity Index
|
-0.2
|
-0.2
|
4.0
|
-4.3
|
-8.5
|
-8.6
|
|
DJ Equity All REIT Total
Return Index
|
3.3
|
-7.5
|
1.5
|
4.0
|
6.9
|
7.8
|
S&P 500, Dow Jones Global ex-US, Gold, Bloomberg
Commodity Index returns exclude reinvested dividends (gold does not pay a
dividend) and the three-, five-, and 10-year returns are annualized; the DJ
Equity All REIT Total Return Index does include reinvested dividends and the
three-, five-, and 10-year returns are annualized; and the 10-year Treasury
Note is simply the yield at the close of the day on each of the historical time
periods.
Sources: Yahoo! Finance, Barron’s, djindexes.com,
London Bullion Market Association.
Past performance is no guarantee of future results.
Indices are unmanaged and cannot be invested into directly. N/A means not
applicable.
it’s not just for millennials! While the
emergence of the Gig economy often is attributed to Millennials, MBO Partners’ 2017 survey found the full-time
Gig workforce is a generational mash-up. It includes:
·
38 percent Millennials (ages 21 to 37)
·
27 percent Gen Xers (ages 38 to 52)
·
35 percent Baby Boomers (ages 53 to 72) and
Matures (ages 72 and older)
Full-time
independents work at least 15 hours per week and average 35 hours per week.
While the term ‘Gig economy’ may
conjure images of ride-sharing drivers and homeowners who rent to vacationers, it
includes a much broader swath of careers and many people who earn six figures. So,
what do Gig economy jobs look like? According to Entrepreneur.com and Forbes,
some of the top gigs include:
·
Deep learning professionals. Facilitating machines learning by
developing neural networks similar to those of the human brain.
·
Robotics
designers and programmers. Responsible
for building and designing mechanical elements and machinery to streamline
operations.
·
Ethical hackers. ‘White hats’ help companies evaluate
systems for security vulnerabilities.
·
Virtual reality freelancers. They develop algorithms and have 3D
modeling and scanning skills.
·
Social
media marketers. Understand platform algorithms and create engaging content
to help companies develop their brands and market their products on a platform.
·
Multimedia artists. Employ
technology to create designs and special effects for digital media.
·
Broadcast
and sound engineering technicians. Sound is a vital part of radio programs,
television broadcasts, concerts, and movies.
·
Carpenters. Demand for
carpenters is expected to grow by 6 percent through 2024.
·
Delivery
truck drivers. This may change with the debut of self-driving delivery
trucks.
If you’re a risk taker looking
for a flexible career or a retiree looking to supplement your income, a job in
the Gig economy may be just the ticket.
Weekly
Focus – Think About It
“You don’t concentrate on risks.
You concentrate on results. No risk is too great to prevent the necessary job
from getting done.”
--Chuck Yeager, retired United States Air Force officer, flying ace, and
test pilot
Best Regards,
Leif M. Hagen
Leif M. Hagen, CLU, ChFC
LP Financial Advisor
Securities offered through LPL Financial Inc.,
Member FINRA/SIPC.
P.S. Please feel free to forward this commentary
to family, friends, or colleagues.
P.S.S. Also,
please remind your friends and family members becoming Medicare eligible that
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their agent
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* This newsletter was
prepared by Peak Advisor Alliance. Peak Advisor Alliance is not affiliated with
the named broker/dealer.
* The Standard & Poor's
500 (S&P 500) is an unmanaged group of securities considered to be
representative of the stock
market in general. You cannot invest directly in this index.
* The Standard & Poor’s
500 (S&P 500) is an unmanaged index. Unmanaged index returns do not reflect
fees,
expenses, or sales charges.
Index performance is not indicative of the performance of any investment.
* The 10-year Treasury Note
represents debt owed by the United States Treasury to the public. Since the
U.S.
Government is seen as a
risk-free borrower, investors use the 10-year Treasury Note as a benchmark for
the long-term bond market.
* Gold represents the
afternoon gold price as reported by the London Bullion Market Association.
The gold price is set twice
daily by the London Gold Fixing Company at 10:30 and 15:00 and is expressed in
U.S. dollars per fine troy ounce.
* The Bloomberg Commodity
Index is designed to be a highly liquid and diversified benchmark for the
commodity futures market. The Index is composed of futures contracts on 19
physical commodities and was launched on July 14, 1998.
* The DJ Equity All REIT
Total Return Index measures the total return performance of the equity
subcategory of the Real Estate Investment Trust (REIT) industry as calculated
by Dow Jones.
* Yahoo! Finance is the
source for any reference to the performance of an index between two specific
periods.
* Opinions expressed are
subject to change without notice and are not intended as investment advice or
to predict future performance.
* Economic forecasts set
forth may not develop as predicted and there can be no guarantee that
strategies promoted will be successful.
* Past performance does not
guarantee future results. Investing involves risk, including loss of principal.
* You cannot invest directly
in an index.
* Consult your financial
professional before making any investment decision.
* Stock investing involves
risk including loss of principal.
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Sources:
